The plan, which was briefed to some EU capitals – but not Dublin – yesterday, is a departure from Theresa May’s deal, which left the entire UK in a customs union with Europe until measures could be developed to ensure an invisible border in Northern Ireland.
Under the new proposals – dubbed “Two borders, for four years” – Northern Ireland will leave the EU customs union alongside the UK, but remain aligned on all single market rules for agriculture and industrial goods for four years.
This will create a regulatory border across the Irish Sea between Britain and Northern Ireland and a customs border between Northern Ireland and the Republic – essentially two borders.
“The proposal means you need to do declarations for goods flowing between Great Britain and Northern Ireland and manage a new border between North and South,” said a source familiar with the proposals.
“It leaves Northern Ireland marooned, with frictionless trade with no one.”
This special arrangement will persist for four years, after which Northern Ireland can either accept a harder border with Ireland by moving closer to British trading arrangements, or continue with its “two borders” arrangement.
EU sources last night told the Irish Independent that the UK proposal fell well short of what is required.
Although the UK government briefed a number of European capitals, Ireland did not make its priority list.
Tánaiste Simon Coveney described the reports as “concerning” and “worrying”.
He said anything that involved customs checks on the island of Ireland amounted to “bad faith” given the commitments the UK have made not to introduce border infrastructure.
“As far back as December 2017 there was an absolute guarantee given to Ireland that there would be no border checks in the future, no related checks and that the all-island economy would be protected in the future as the default position through regulatory alignment if there couldn’t be a political agreement on something else,” Mr Coveney told Virgin Media’s ‘The Tonight Show’.
He said the backstop was always supposed to be temporary but could only end when another mechanism was found for keeping the border open.
The Tánaiste repeated the well-worn Irish position that a backstop with a time-limit was not a backstop at all.
“We are not going to sign up to or acquiesce to managed border infrastructure as a permanent arrangement on the island of Ireland which will fundamentally undermine and disrupt the economy,” he said.
Mr Coveney said that if a ‘no deal’ results in a hard border, that will be the choice of the UK government.
The UK proposes that Northern Ireland leaves the EU customs union at the end of the transition period in 2021, alongside Britain, which will move directly into a free-trade agreement with Europe.
The UK will have a fully independent trade policy, and be free to pursue trade deals with the rest of the world. No extension to the Brexit transition period will be sought.
On the island of Ireland, this will create the need for customs checks between Northern Ireland and the Republic, but these will not take place at the border, but be set back from the border. The proposal does not set out precisely how far back.
Unless the EU grants a blanket exemption, this will require, under the Common Transit Convention, all goods shipments to be placed in sealed containers, with barcodes scanned at the border.
For the vast majority of businesses, this means presenting shipments at both a transit “office of departure” and “office of arrival” on either side of the border. Large businesses with audited accounts can avoid this by joining an “authorised economic operator” scheme, which enables checks at business premises.
This will require two layers of infrastructure, either side of the border, with shipments tracked in real time via cameras, GPS and technology.
However, the UK side is no longer suggesting that the details of these schemes will be worked out during the transition period, which runs to the end of 2021, with the backstop to kick in if satisfactory arrangements cannot be agreed upon.
Instead, the UK is demanding that the EU and the Irish government agree immediately and in advance in the Withdrawal Agreement to customs checks and controls in Ireland, with operational details to be hammered out during the transition period.
To further facilitate this, the UK will also demand within the next 10 days that the EU grants Northern Ireland blanket exemptions from the EU’s Union Customs Code (UCC) whose requirements will be supplanted by so-called “alternative arrangements”.
The UK is demanding that Northern Ireland must remain outside the EU’s VAT system and that there must be no VAT-related checks at the Border.
EU sources have indicated this is hugely problematic for the EU side, where the EC has come to regard VAT implementation and collection as a core part of the EU’s single market, requiring the full spectrum of border checks and controls. The UK wants to see these waived.
The UK will propose Northern Ireland remains aligned with EU rules on agricultural and industrial goods, with full oversight of the European Court of Justice and an agreement to implement any new rules that come on stream.
This arrangement will last for four years. During this period, goods travelling from Britain into Northern Ireland will need to make declarations at the border – either using existing customs declaration forms, or a new system.
Meanwhile, the UK demands that Northern Ireland is not subject to any of the EU’s so-called “level playing field” requirements.
These are agreed minimum standards on workers’ rights, social conditions and environmental standards that the EU has already said it will expect the UK to adhere to as part of any preferential access agreement (FTA) to the EU’s single market after Brexit.
After the expiry of the four-year time-limit, Northern Ireland would need to choose between maintaining the “two borders” arrangements or diverging from EU rules alongside the UK, which could require a commensurate hardening of the border – for example the installation of additional border inspection posts near the border.